***PRESS RELEASE***

COMMITTEE ON THE PRESENT DANGER: CHINA ILLUMINATES

OUTRAGEOUS PLANS FOR U.S. UNDERWRITING OF P.R.C. THREAT

FEDERAL EMPLOYEES, MILITARY PERSONNEL PENSIONS TO BE TAPPED

Washington, D.C.— The Committee on the Present Danger: China (CPDC) yesterday presented chilling evidence that U.S. capital markets have been – to paraphrase the quip attributed to Vladimir Lenin – giving the Chinese Communist Party (CCP) the money to pay for the rope with which they will hang us. In the course of the Committee’s eighth Threat Briefing, influential legislators, finance experts and national security practitioners joined forces to warn about the extraordinary dangers associated with this practice and to urge that an effort now underway to extend it to the retirement funds of U.S. government and military personnel, past and present, must be stopped immediately.

The nine presentations featured in-person and video-taped remarks raising alarms about investments by the Morgan Stanley MSCI All-Country World ex-U.S. Investable Market Index in CCP-owned or -tied companies that: have been sanctioned by the U.S. government; are involved in activities threatening to America’s national security and vital interests; and/or are implicated in human rights abuses. Even more astounding is the fact that these and the other Chinese companies featured in this Index are not required to conform to the transparency and accountability requirements imposed on their counterparts/competitors in this country.

The Threat Briefing’s participants were particularly alarmed at the prospect that a decision taken by

the U.S. Federal Thrift Savings Review Board in November, 2017 will – unless suspended and reversed – shortly result in at least some of the 5.7 million veterans and serving members of the armed forces and other previous and current employees of the federal government soon being compelled to have their retirement funds invested in the stocks of Communist Chinese companies. Each presenter, in turn, argued that this unacceptable initiative must not be actualized in 2020.

A clip from a CNBC interview this week with Marco Rubio, a senior member of the Senate Foreign Relations and Intelligence Committees, who has been a leader in challenging the growing threat posed by the CCP, in general, and, in particular, in opposing its underwriting by American investors. On June 12th, Senator Rubio wrote the chairman of MSCI, Inc., Henry Fernandez, raising serious questions about his company’s inclusion of problematic Chinese companies in its index and MSCI’s imminent inclusion of many more. (He has had no response to date from MSCI.) And on August 26th, the Florida Republican joined with New Hampshire Democrat Senator Jeanne Shaheen in writing the Chairman of the Federal Thrift Savings Review Board (FTSRB), Michael Kennedy, demanding that the Board abandon its plan to have the Thrift Savings Plan (TSP) mirror the MSCI’s portfolio in 2020. (As of now, there is no indication that the FTSRB will do so.)

Former House Speaker Newt Gingrich made a video-taped appeal calling the practice of giving Chinese companies what amounts to preferential access to the U.S. capital markets and allowing a build-up of ominous capabilities in the PRC “really wrong.” He observed that “All of this is going to have to be changed if America is going to survive.”

Jim Banks of Indiana, a member of the House Armed Services Committee and the lead sponsor of the “Blocking Investing in our Adversaries Act” (H.R. 2903), spoke of a “call to action” by President Trump that has prompted him to pursue legislative initiatives aimed at pursuing a “whole of government” approach to defeating threats from China. He pointed out that, “It seems ironic that federal employees’ funds would be used to support our adversaries” since “many of these employees spend their entire career[s] countering adversarial actions by countries like China.”

Finance sector leader and CPDC founding member Kyle Bass, Chief Investment Officer of Dallas-based Hayman Capital, said in a video-taped statement that “fiduciaries should be held to a higher standard” than forcing the investment of “our military’s retirement funds in China…a regime that live organ-harvests, has up to three million political prisoners and that steals between $250-500 billion worth of U.S. intellectual property every year.” He argued that we should, instead, “force our fiduciaries…to invest in companies that comply with U.S. law.” Mr. Bass also applauded Sen. Rubio’s bipartisan legislative initiative known as “The EQUITABLE Act,” which is expected to deregister Chinese companies that fail to “conform to American Dodd-Frank standards and/or covered auditor oversight.”

Kevin Freeman CFA, also a CPDC founding member and the host of Blaze TV’s “Economic War Room with Kevin Freeman,” drew on life-lessons learned while he worked for one of the great investment gurus of all time – Sir John Templeton. Freeman observed in video-taped remarks that “China has learned how to game our addiction to market indeces with plans to capture a lot more American money for their side. We all know we are in an economic war with China. Why should we fund both sides of it?” He also asked: “Should we allow a single, influencible entity such as MSCI to determine where the money of patriotic Americans goes, including service members, government employees and former employees?” Mr. Freeman concluded, “It makes no sense from an investment perspective and it’s truly criminal from a national security perspective.”

The former Senior Director for International Economic Affairs at the Reagan National Security Council, Roger Robinson, argued that the Thrift Savings Plan was in a unique category with respect reckless investment in China insofar as it involves taxpayer funds, not simply private sector money. He impressed upon the audience that, if the TSP Board’s decision stands, federal civilian and military employees and retirees will have only one option if they wish to diversify their holdings by investing in international companies – namely, buying Communist Chinese stocks, including for example ones building up China’s totalitarian police state apparatus. Mr. Robinson asked whether House Speaker Nancy Pelosi would want her retirement funds invested in this fashion in light of her support for some of the prime victims of that oppressive system: the people of Tibet. He warned that China would thus be able to build a “China lobby” capable of checkmating U.S. security interests by enlisting millions of Americans whose personal vested interests would subordinate the nation’s priorities to their own.

The CEO of the American Securities Association, Christopher Iacovella, brought the expertise of a highly credentialed industry insider to bear with his insights about the implications of China’s incipient penetration of the Thrift Savings Plan. He pointed out that his association’s priorities are “to promote the trust and confidence of American investors” and “to help small businesses across this country gain access to capital they need to create jobs and grow the American economy. Allowing any American investor to put their hard-earned money into passive indexes that include Chinese companies who routinely avoid financial audits satisfies neither pillar of this mission and it threatens America’s economic and national security.” He added that, “The TSP decision borders on fiduciary malfeasance because it ignores a fundamental tenet of our securities laws – and that’s investor protection.” He called on “the TSP Board to immediately reverse its decision to force U.S. government employees to invest in any index that includes Chinese companies.”

Donald Trump’s former Chief Strategist, Steve Bannon, emphasized that we are starving American companies of capital vital to our economic growth, while making limitless capital available to China. He argued that Donald Trump was elected president because of the de-industrialization of our country. He urged that we not going to stand for a celebration of the 70th anniversary of the Chinese Communist Party’s enslavement of the Chinese people. Instead, we must “hold people accountable. Where’s the fiduciary responsibility?” Mr. Bannon said addressing what is being done with our money in support of China is the “defining issue of our time.” Making an explicit comparison to the dark era of the 1930s, he warned that, “The future of not just of our country and the freedom of the Chinese people [but] the future of the entire world is going to depend on this.”

CPDC Chairman Brian Kennedy and Vice Chairman Frank Gaffney made, respectively opening and closing comments that underscored the high stakes associated with the TSP Board’s decision to allow U.S. government and military personnel to have their retirement funds invested in Communist China and the need immediately to suspend and reverse it.

The mission of the Committee on the Present Danger: China is to help defend America through public education and advocacy against the full array of conventional and non-conventional dangers posed by the People’s Republic of China. As with the Soviet Union in the past, Communist China represents an existential and ideological threat to the United States and to the idea of freedom—one that requires a new American consensus regarding the policies and priorities required to defeat this threat. And for this purpose, it is necessary to bring to bear the collective skills, expertise and energies of a diverse group of experts on China, national security practitioners, human rights and religious freedom activists and others who have joined forces under the umbrella of the Committee on Present Danger: China.